Posts Tagged ‘class action CLE’

If you’re a Colorado attorney who didn’t make it to the quarterly CLE luncheon sponsored by the CBA class actions subsection, you missed out.  Dirk W. de Roos and O. Russel Murray gave excellent presentations on developments in class arbitration.  If you’d still like to hear the entire presentation, you’re in luck.  CLE Colorado recorded the audio of the presentation and will include it among its home-study materials.  We’ll have a link on the class action subsection website as soon as it is available.  In the meantime, here are some of the key points:

  • Class arbitration waivers, contracts requiring arbitration but specifying that arbitration proceed on an individual, not class, basis, have been used in a variety of contracts, including employment, executive compensation, consumer, franchise, and settlement agreements.
  • Outside the consumer context, class arbitration waivers have mostly been upheld.
  • Where class arbitration waivers are invalidated, courts most often do so based on traditional contract principles.
  • Class arbitration waivers are increasingly being struck down in consumer agreements, especially in “shrink-wrap” type agreements where the consumer is agreeing simply by using the product.
  • The key U.S. Supreme Court case recognizing the viability of class arbitration (not waivers) is Green Tree Financial Corp. v. Bazzle, 539 U.S., 444 (2003).
  • Class arbitration rules generally track FRCP 23, the main difference being that the decision maker is a private neutral instead of a judge.
  • Class arbitration rules differ from traditional arbitration because they lack the key element of privacy and confidentiality.

Each of the speakers had insights that I thought were interesting:

Dirk de Roos noted that a split among jurisdictions on the enforceability of class arbitration waivers may impact whether a nationwide class can be certified in court over a particular issue given the need to apply different standards to decide whether the action can proceed in court as a class action in the first place.

Russel Murray commented that class arbitration involves a convergence of two more general, controversial issues: 1) many people have an animosity toward class actions and favor ways to limit their application and effectiveness, but, on the other hand  2) many other people have deep concerns about the use of arbitration provisions in consumer agreements and are opposed to agreements that potentially limit the ability of consumers to enforce their rights.

Finally, here is one other item worthy of note.  Russel Murray noted that the National Arbitration Forum rules allow collective resolution of claims only on an opt-in basis, as opposed to the opt-out scheme contemplated by Rule 23 and most other class arbitration rules.  This means that only those plaintiffs who affirmatively opt in to the class after notice. 

The possibility of class arbitration agreements that involve restrictions on class actions less than a complete waiver of the right to bring the case on a collective basis is intriguing.  Imagine a cell phone company including a standard term in its agreements that every claim is subject to class arbitration but that the action would proceed under the National Arbitration Forum rules.  This provision would not be a class arbitration waiver in the strict sense, but it would involve a significant limitation on the ability of a plaintiff to seek collective redress as compared to a class action in court.   As far as I know, the enforceability of this type of class arbitration “reduction” provision has not been tested in court.

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I’m pleased to report that the Colorado Bar Association Class Action, Derivative Suits, and Mass Torts Subsection has scheduled its Fall 2008 CLE Luncheon for December 16.  Dirk de Roos of Faegre & Benson will speak on class arbitration waivers and O. Russel Murray of ADR Source will talk about class arbitration generally.

Here are the particulars:

Legal Trends and Best Practices in Class Arbitration

Tuesday, December 16, 2008

CBA Offices, 1900 Grant Street, 9th Floor,
Capitol Conference Room Denver, CO 80203

Class arbitration waivers are clauses in contracts requiring that disputes be arbitrated, and prohibit claims from being brought as class actions.  Whether class arbitration waivers are enforceable, especially in consumer contracts, has been a hotly contested issue in the courts in recent years.  Where class arbitration waivers are not enforceable or are enforceable only in part, parties my find themselves litigating their dispute as a class action but in an arbitration setting rather than a court.  This program will cover trends, best practices, and recent decisions relating to class arbitration and class arbitration waivers.  Some of the topics to be addressed include:

• Trends in decisions on the enforceability of class arbitration waivers.
• How are the Colorado courts likely to rule on class arbitration waivers?
• What does a class arbitration look like?  How is it different from a class action?
• Who is bound by an arbitrator’s decision in class arbitration?
• Can the loser of a class arbitration appeal?

The cost of the luncheon is $15.00 for Litigation Section members, $20.00 for Non-Members.

Registration for the Luncheon begins at 11:30 a.m. and the Luncheon will begin at 12:00 PM.

To RSVP for the Luncheon:
Call 303.860.1115, X727 or SEND AN E-MAIL TO MAILTO:LUNCHES@COBAR.ORG, PLEASE INCLUDE YOUR NAME AND Class Action luncheon in your e-mail.

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As promised, here are some highlights of my notes from Friday’s 12th Annual National Institute on Class Actions:

What are the Hot Trends in Class Actions?

Following an introduction from Tydings & Rosenberg partner and National Institute on Class Actions founder and John B. Isbister, Columbia Law Professor John C. Coffee kicked things off with his annual review of developments in federal class action law.  His review covered trends and key decisions over the past five years or so.  He identified several key areas that he believes are likely to be addressed in the federal courts in the near future.  They include:

  1. Who has the burden of proof in establishing or disproving the elements of class certification?  Is a mini-trial necessary in which the court makes determinations of fact?  If so, then what is the standard of proof?  Is burden-shifting appropriate in certain cases?
  2. Under what circumstances is class certification appropriate under FRCP 23(b)(2) in “hybrid” class actions in which both damages and declaratory or injunctive relief are sought?  What types of damages are “incidental” to equitable relief for the purpose of allowing certification under FRCP 23(b)(2)?
  3. Are civil RICO wire or mail fraud claims appropriate as an alternative to state fraud and consumer protection claims?  Is reliance a required element?  Can reliance be presumed?
  4. Is partial or issue class certification available if predominance cannot be proved as to all aspects of a given cause of action?  Does partial class certification violate due process?
  5. Can company-wide, multi-job employment discrimination claims be certified as class actions?
  6. Are class arbitration waivers enforceable?

Which Decisions Are Class Action Lawyers and Commentators Talking About Most?

Here are some of the recent key decisions highlighted by Professor Coffee and others during the conference:

Highlights of Panel Discussions

“CAFA & Consequences: Measuring the Impact of the Class Action Fairness Act of 2005”

This panel, moderated by Arnold & Porter partner Fern O’Brien, included panelists John H. Beisner of O’Melveny, Michael D. Donovan of Donovan Searles, and the Honorable Fred Biery, U.S. District Court Judge for the Western District of Texas.

One of the key topics discussed by the panel was the impact of CAFA in encouraging filings in federal court and the resulting increase in the assignment of cases to the multi-district litigation (MDL) panel.  Class action practitioners will have to become more familiar with the MDL process as more class actions are filed or removed to the federal courts.

One of the panelists noted that although the number of class actions filed in federal court has increased, the number of “negative value” cases in the federal courts have not increased.  “Negative value” is a term used to describe class actions involving claims where individual amounts in dispute would be far less than the amount necessary to litigate them.

The panel also discussed recent cases addressing the meaning of the “mass tort” provision, which subjects certain mass tort cases to CAFA even if they are not technically “class actions.”

“Consumer Fraud Class Actions on Life Support”

This panel was moderated by Scott L. Nelson, and attorney for the Public Citizen’s litigation group.  The panelists were Nelson’s fellow Public Citizen lawyer Deepak Gupta, Greenberg Traurig partner Donald R. Frederico, and Quarles & Brady partner Cristina Hernandez-Malaby.

The Honorable Jack B. Weinstein of the U.S. District Court for the Eastern District of New York had also been scheduled to be on the panel, but word was that he tied up with a capital murder case.

The main focus of the panel’s discussion was the Second Circuit Court of Appeals’ decision in McLaughlin, in which it reversed Judge Weinstein’s certification of a class of purchasers of “light” cigarettes on a “fraud on the market” theory of common injury.  They also covered Judge Weinstein’s more recent decision in In re Zyprexa Products Liability Litigation, 04-MD-1596, slip op. (E.D.N.Y. Sept. 5, 2008), in which the Judge appeared to be testing the limits of the McLaughlin holding.  For of us who are too busy or lazy to read all 300 pages of the decision, Ms. Hernandez-Malaby suggests starting at page 230.

The panel also covered several other topics, including

  • Superiority analysis in “no-damages” class actions under FACTA.
  • RICO claims as an alternative to traditional consumer fraud claims.
  • Claims claiming injury due to reliance by others.

“Unpacking the ‘Rigorous Analysis’ Standard”

This panel, moderated by NYU Professor Geoffrey Miller, included James P. Muehlenberger and the Honorable Nanette K. Laughrey of the U.S. District Court for the Eastern and Western Districts of Missouri.  UPDATE 11-10-08: The third panelist was David S. Stellings, an able replacement for his partner, Elizabeth Cabraser.

The panelists discussed the approaches taken by the various federal Circuit Courts of Appeals in applying the “rigorous analysis” standard for ruling on class certification and provided their views from a plaintiff’s, defendant’s, and judge’s perspective.  Key decisions discussed included:

“I Could Have Sworn It Was CAFA, Not Kafka!”  The Metamorphosis of Ethically Prosecuting, Defending, and Settling Multi-State, Class-Action Cases — A Surreal-Life, Three-Act Play.” 

I couldn’t begin to describe this presentation in a way that would do it justice, but let’s just say that it was both entertaining and surprisingly true to life.  The play starred its creator, plaintiffs’ lawyer Daniel R. Karon, his colleage on the plaintiffs’ side, Vincent J. Esades, defense lawyers Cari K. Dawson and Steven Glickstein, and notice administrator Katherine Kinsella.

“Class Actions Sans Frontières”

The day ended with the presentation that I had been anticipating most eagerly, a panel discussion on developments in global and multinational class actions.  Sylvie Rodrigue of Ogilvy Renault in Toronto led an intriguing discussion of this new and fast-developing area, with a panel that included Cohen Milstein partner, Lynda Grant, former managing partner of Shook Hardy & Bacon’s London office, Laurel Harbour, McCarthy Tétrault’s David I.W. Hamer, and Charles Wright, of Siskinds in London, Ontario.

Here are a summary of the key issues discussed:

  • Worldwide class action settlements can be risky due to problems with the ability to enforce foreign judgments that purport to bind class members in other countries.
  • “Foreign cubed” securities class actions are a hot topic.   The Second Circuit Court of Appeals’ recent decision in Morrison v. National Australia Bank Ltd., supra, appears to limit the circumstances in which these cases can be brought in the U.S. court, but the court also refused to adopt a bright-line rule that would prohibit all “foreign cubed” class actions.
  • The International Bar Association has created a task force charged with preparing guidlines for when foreign class action judgments can be enforced.
  • Class certification guidelines in Canadian provinces tend to be more relaxed than those in the U.S., and class certification decisions in Canadian courts often come sooner than in U.S. courts when parallel proceedings are filed.
  • Group action procedures in Europe are expanding but are still not in wide use.
  • A task force has been created to look into protocols for coordination between U.S. and Canadian courts in parallel actions.
  • General counsel for multinational companies need to consider exposure on a global basis when making settlement decisions, not just U.S. exposure.
  • Developments in class action law in Canada have made pursuing a joint litigation strategy in both Canada and the U.S. financially and legally viable, as opposed to just a few years ago, when a case may have been worth pursuing only if it could somehow be brought in U.S. courts.
  • Increased coordination between plaintiffs’ counsel, outside counsel for defendants, and judges will become ever more important in the future.

Summary Notes

Overall, this was one of the better class action CLE conferences that I have attended.  The speakers were all top-notch practitioners, academics, or judges who provided a well-rounded range of perspectives.  The topics were all timely and interesting.  If you have the means, consider attending next year.  If you’re interested in purchasing the audio from this year’s event, it should be available within a few weeks according to the ABA’s website.

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My apologies for not posting this notice sooner, but I will not be doing a Class Action Blogosphere Weekly Review this week.  I am in New York for the 12th Annual ABA National Institute on Class Actions.  I’ll be posting a summary of some of the news, tips, and trends discussed during the conference for anyone who isn’t able to attend. 

For anyone who will be there tomorrow, please look me up.  I’d love to meet you.  I’ll be moderating one of the lunch discussion groups.  The lunch discussions will be on a variety of specific topics, including securities, consumer, employment and antitrust class actions, as well as CAFA and mass torts.  Two of the tables, including mine, will have an open discussion of class actions generally.  This should be a great chance to compare notes with colleagues from around the country.

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If you’re interested in following international developments in class action law, there are a couple of upcoming ABA CLE programs that might be of interest.  Unfortunately, the are both scheduled for the same weekend, so you’ll have to choose:

The 12th Annual National Institute on Class Actions is scheduled for November 7 at the New York Marriott Downtown Hotel.  In addition to a variety of interesting topics including the impact of the Class Action Fairness Act (CAFA), and developments in consumer class actions, the program will conclude with a panel discussion about the globalization of the class action marketplace.

That same weekend in the Biltmore Hotel in Miami, the ABA International Law section and International Bar Association are co-sponsoring a conference entitled The Next Big Wave in Cross-Border Litigation.  The conference will kick off with a presentation on mass litigation in the developing world.

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The Class Actions, Derivative Suits, and Mass Torts subsection of the Colorado Bar Association has scheduled its inaugural CLE luncheon for June 25, 2008 at noon at the CBA offices in Denver.  The topic will be “appropriate” government official notification of federal class action settlements under the Class Action Fairness Act, 28 U.S.C. 1715 (a topic previously discussed on ClassActionBlawg.com here).  Following an overview of the statutory notice requirements, a representative of the Colorado Attorney General’s office will provide an appropriate government official’s perspective on the notice requirements, including what the AG’s office does with CAFA notices when it receives them and the relationship between private class actions and AG consumer protection efforts.  More information on the program will be available soon on the CBA Class Action Subsection webpage.

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